NAFTA Update: December 7, 2017

Canada’s Chief Negotiator Testifies in Committee

On Monday, December 4th Canada’s Chief Negotiator for NAFTA, Steve Verheul, testified before the House Standing Committee on International Trade. His comments mainly reinforced information available elsewhere. He highlighted areas where negotiations are going well, unworkable U.S. proposals, what would happen if the U.S. withdrew from NAFTA, and trade opportunities in Mexico. Key points included:

  • Traditional aspects of the negotiations are seeing real improvements. These include telecommunications, good regulatory practices, customs and trade facilitation, sanitary and phytosanitary measures, sectoral annexes, financial services, anti-corruption, technical barriers to trade, and others.
  • Certain S. proposals are unworkable. These are those related to rules of origin in automobile manufacturing, government procurement, dispute settlement, the sunset clause, and elimination of Canadian tariffs on dairy, poultry, and eggs.
  • If the U.S. withdrew from NAFTA:
    • The currently suspended bilateral Canada-U.S. Free Trade Agreement would come back into force.
    • Canada and Mexico would maintain NAFTA between themselves.
    • Canada and the U.S. would probably continue to be each other’s largest trading partners.
    • There would be some adjustment in currencies.
  • The hope is that if the U.S. initiates the process for withdrawing from NAFTA, S. industry would respond strongly in the six month period afterwards and prevent them from withdrawing.
  • It is important to communicate with stakeholders in the U.S. about the detrimental impacts of the American proposals.
  • Canada sees significant opportunities related to agriculture, agri-food, and natural resource-related sectors in Mexico.